Sweden has come a long way since 1661, when they became the first European country to introduce bank notes.
Now many of the country’s largest banks, including SEB AB, Swedbank AB and Nordea Bank AB, have put the notes to rest, no longer conducting cash transactions across 65-75 percent of their branches, reports Bloomberg. The Swedish banking system has shaping a high-tech nation, pushing towards a heavy reliance on card transactions, online shopping and mobile phone payments.
Opportunities for cash in most Swedish cities are continuing to narrow. Swedish notes, kronas, are only in circulation in 20 percent of local shops, according to the Swedish Trade Federation. The majority of public transportation services do not accept cash payments; instead, tickets are purchased on the Internet or via mobile phone, and a growing number of businesses only conduct card payments as well. The significant decline of cash use is further highlighted by the fact that some Swedish churches have even installed card readers to accept donations.
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Anna Sundblad, a Swedbank spokeswoman, commented, “We’ve removed the manual cash handling simply because we’re seeing a change in behavior among our customers. Only five percent of our customers make over-the-counter cash transactions,” reports Bloomberg.
The Nordic countries’ acceleration towards the digital era is not the first time they have set trends in payment. The region moved eradicate checks nearly 30 years ago, while people from Britain and the United States still commonly use checks as payment. Not only are Sweden’s banks gaining attention for their anti-cash movement, but the country’s financial industry has done comparably well in the midst of the European crisis. The shares of Sweden’s central banks have increased significantly over the last few years.
The move towards digital payments offers more than consumer convenience, but Swedish bankers have also revealed that omitting cash services has helped to cut costs and raise revenue. Replacing cash with card payments is raising profits from the transaction fees. SEB AB bank reported an 8 percent raise in profits from fees in 2012, which equals about 4.37 billion kronor. Moreover, with fewer banks holding cash, bank robberies have decreased with only five incidents being reported in 2012. Five seems insignificant when compared to the 16 reported in 2011, and the 110 reported back in 2008.
Swedish banks show no signs of slowing down with their digital transformation, and it seems they are well in the lead when compared to countries such as Germany, where large international chains such as Ikea still refuse to accept Visa or MasterCard payments at outlets.
“The number of card payments in Sweden is increasing continuously and for ten years we’ve seen strong growth, which we expect will continue,”Bengt Nilervall, head of payments at the Swedish Trade Federation, told Bloomberg.
“Many European countries are far behind.”
To read more about Sweden’s push away from a cash-based society, read the full Bloomberg article here.
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